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Show ARGUES NECESSITY OF GDLOSIlDSflO Mining and Scientific Press Comments on Views of Political Economist. i Basic Principles of Finance Held to Justify Yellow Yel-low Metal. la the current issue of the Mining" ani Scientific Press is published a coin muni-cat muni-cat Ion by John Mcpherson, a western political economist, dealing at some length with the "status of gold." The editor of the publication, in commenting upon, the views expressed by Mr. Mcpherson, Mc-pherson, says: "Discussions concerning gold are of vital moment at this period when sober financiers finan-ciers are willing to consider economic experiments ex-periments not less at variance with the old order than the freak state constitutions constitu-tions that became epidemic In the west 1 some years ago. We are not now concerned con-cerned with those legislative anomalies, some, but riot all, of which represented proper and desirable social evolution, but we welcome letters such as that by John fcPherson, in this issue, since they deal with gold, the thing that is fundamental in economics, because it is the basis of exchange. Problem Needs Airing. "Critics may entertain divergent opin-. opin-. Jons on details, but Mr. McPhorson and every other man who t'ninks seriously and with conviction on ihe problems of supply and demand, of production and consumption, of distribution of commodities, commodi-ties, and the currency, settlements involved, in-volved, is contributing to the mental poise of the nation at a time when popular theories tend to lead away from the old tried practices. Some economic principles princi-ples have been established which seem to "be as fundamental and certain as biologic laws, but views change, and the physiocrats physio-crats of one age are superseded by the conservationists of another; we swing from the Idealism of Individualistic free traders to dreams of controlled free trade under a system of international "allocation." "allo-cation." Nevertheless, through all the vicissitudes of social evolution there has been one unchanging economic fact men have been universally agreed, apart from and above statutes and decrees, that gold la the hand will buy meat for the belly. The reasons why gold was selected as the supremely desirable metal to serve as a token of service with which to command com-mand the services of others has been discussed dis-cussed so often that we need not review them. The reason, however, for seeking and employing a metal possessing the well-known monetary attributes is not often brought into prominence. It is simply sim-ply the fear of political disturbance. Banking is based on confidence. It is not merely reliance on the honor and integrity integ-rity of the banker, nor belief in the wisdom wis-dom of the banking laws, but faith in the stability of the government, that admits of the development of a credit , system. Granting such confidence, all : manner of conveniences in the facilitation of exchange become possible. A smaller ratio of gold to the volume of business In terms of money then proves to be practicable. It is part of our belief in each other as social beings, as reasonable law-abiding men and women, that makes us content with the credit paper that society so-ciety gives its pledge to honor in the wares of -daily need. One glance at Russia Rus-sia or Mexico, however, reveals why men insist upon available gold on demand as the basis for exchange. i Instincts Must Change. "In days of peace men laugh at tales , of buried treasure. It is hard to realize, at a time when peace and security reign, that a preceding generation lived in the midst of alarms and subject to pillage by irresponsible and transitory officials, yet deep in the mind, like the instinct of a wild animal, lies the fear of danger that prompts us to desire the one substance for which men will exchange the food and clothing necessary for existence. It takes a long time to civilize the whirl out of j a dog before lie lies down: it Las not yet been done successfully. LikCvit-'e, before the- primitive desire (jr nol a.s a personal per-sonal possession is suivbniid by satisfaction satis-faction with a pie'.-e of paper as the only representation uf a claim on Liu.-; world' goods as a return for service rend ere', it will be necessary thai many generations genera-tions shall havu grown j accustomed to the undisturbed enjoyment of the refinements refine-ments of social organization that they may count upon the siabilirv of the new order as firmly as on tho daily rising of t-he sun. Where Mine Is Affected. "The significance of this psychology of tiie demand for jioicl is that the royal metal will not be retired from its ancient duty as real money. To internationalize the gold reserve would be equivalent to retiring ft, but the reaction would be so prompt and so pronounced that the attempt at-tempt to initiate such a scheme would defeat itself. This, however, does not settle the question that so deeply concerns con-cerns tiie gold miner, which is the purchasing pur-chasing power of the bullion produced. If gold mining were to cease, the demand for payment in metallic currency would increase, in-crease, and a further rise in prices undoubtedly un-doubtedly would follow, on account of the different esteem on the part of the public for credit money and for hard cash. This would encourage an outside market for gold where a normal ratio to commodities would assert itself. Ordinarily Ordi-narily we would hesitate to offer suggestions sugges-tions of tiiis character, but the time has ; come, not for ultra-social experiments in finance, but for grappling firmly with the concrete problem of giving to gold such a relation to exchange as will admit of continued con-tinued profitable production of the metal, so that a reasonable amount may be forthcoming to serve as a sate basis for the currency expansion required by the increasing population of the earth and the growing magnitude of commercial transactions. Retiring gold into the financial finan-cial background will not do while the Bolshevists are raging in Russia, while the I. W. TV. hamper industry in the Unit ed States, and while the premier of England openly warns his country of the danger of civil war. The best antidote for revolution is the surety of opportunity to make a due amount of money for one's needs by peaceful industry, and to receive payment in something that is convertible con-vertible into gold on demand. AVith gold mining on the wane, with the shortage of gold leading financiers to discuss cobweb cob-web designs of a frail beauty, it is evident evi-dent that serious consideration of this problem should not be deferred.. In the interest of the public welfare tiie restoration restora-tion of gold as a measure of value compatible com-patible with the measure of the effort .required to get it is imperative. This does not mean that we must 'raise the price,' or juggle with the standard, but it does mean that we must find a way, without incurring disaster, to bring credit money back to the level of the real." j |